Posted on 06/13/2018 4:23:50 AM PDT by reaganaut1
More than a few conservative intellectuals have warmed to Donald Trumps trade protectionism because it supposedly helps blue-collar Americans. But what if his tariffs do the opposite?
Erica York at the Tax Foundation crunched some numbers recently showing that Mr. Trumps proposal for a 25% tariff on imported cars, trucks and parts could eliminate half of the income gains from tax reform for millions of Americans. Those in the lowest income quintile could lose 49% of their tax gains. Say for ease of calculation that these folks received a $100 after-tax bonus from changes like the doubled standard deduction. After auto tariffs that would be whittled down to $51, Ms. York notes.
The tariffs shave gains in all income brackets, but no one is hurt more than the poor and middle class. Take the fourth income quintile, or a household making at most about $70,000 a year in adjusted gross income. The Tax Foundation says auto tariffs could erase nearly 30% of that familys after-tax income bump. Ditto for the third quintile, or a family earning no more than $43,000 a year.
(Excerpt) Read more at wsj.com ...
Propaganda from the WSJ. Tariffs depress imports by raising prices on selected imported goods. There is nothing that is not substituted.
If Canadian cheese goes from $12 to $14 the consumer will buy the Wisconsin cheese which is already at $13. The price elasticity of cars has a slower, but equally determinable cycle. It just takes a while. The cheese happens the week after tariff imposition.
These tariffs only stay in effect as long as the recipient countries keep their tariffs and taxes on American goods.
I doubt very seriously if the recipient countries will keep their tariffs while this is going on. They will reduce, our tariffs will reduce, trade will ensue, bigly.
>>Those in the lowest income quintile could lose 49% of their tax gains. Say for ease of calculation that these folks received a $100 after-tax bonus from changes like the doubled standard deduction. After auto tariffs that would be whittled down to $51, Ms. York notes.
Those in the lowest quintile dont buy high end BMWs. If they do buy new, it is a Kia, Hyundai, Toyota, etc which are all made in the USA.
The genius of Trump’s timing was the tax deal gave him the leverage to enter trade wars.
Yep - not to mention any “inconveniences” will be short term and long term results will favor us.
Do we want to have a high standard of living, or do we want to have few unemployed people? It's nearly impossible to accomplish both, since a country with the highest standard of living in the world will have a hard time being competitive in a global economy unless it: (1) relies on cheap imports to prop up its living standards; and/or (2) maintains robust domestic industries through heavily automated production processes that don't require a lot of workers.
What Free Traitors at the noWall Street Urinal want you to believe is that the supply function is static and no new domestic suppliers will EVER come on line. Despite their best efforts brand new factories are still being built in the USA all the time. Not as many as are closed mind you but the situation is dynamic and not static. To repeat myself with more domestic supply the pressure will be to reduce prices.
Tariffs INCREASE revenues reducing the budget deficit dramatically. Deficit hawks should be cheering.
Exactly. IF they do buy new ...
I suspect very few people in the lowest quintile buy new cars, and if they do they probably end up having them repossessed disproportionately. The average car on the road in the U.S. today is something like 12-13 years old, and the lowest quintile probably ends up as the second, third or even fourth owners of these cars.
Agreed. The negativity in the media is astounding
But what if.....
WHAT IF??????
WaPo asks a hypothetical question and describes the doom n gloom that results????
I’m SICK of the leftist media.
CW2 looms....
http://thehill.com/homenews/administration/391278-internal-white-house-study-found-trump-tariffs-will-hurt-us-economic
It’s a shame that the WSJ doesn’t understand economics.
Every action has reactions, both known and unknown, positive and negative. That is not a reason to just accept the status quo. The Trump Tariffs very likely will be temporary. As to them eating up 40% of the gains from the new tax law at least the WSJ is admitting there were benefits to the tax law. IF that really is accurate people are still 60% ahead from last year.
https://mises.org/library/ronald-reagan-protectionist (1988)
Trade wars are like any other war. There are costs. There are casualties. There are hardships to be borne by some segments of the market. The expectation is that the longer term benefits of winning outweigh the shorter term cost of the war. And the hope that winning doesn’t cripple you in the process.
I saw nothing inherently wrong in what they said. Tariffs do raise costs, at least in the short run. Lower incomes will be hit disproportionately to higher incomes.
the only thing that will give the administration pause is if the market crashes and people know it was because of tariffs.
Trump’s actions on tariffs have the effect of stimulating manufacturing in the US.
People have no idea how close to extinction the steel and forging industry has gotten. It is a national security threat.
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